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+--- Thread: Deal - $7-$10B range (/showthread.php?tid=2845)
Deal - $7-$10B range - Petro2458 - 02-22-2013
A hunch...but I suspect the binding bid process could be closed earlier than next Thursday if IOC chooses and that the date provided to the market had some time provision for possible delays. And hence it will be first week in March for IOC deal decision as the jan press release indicated. After all this time, it's very likely that IOC has set this up to ensure they beat expectations on this (timing wise) as a courtesy to the shareholders...and as an indication of how they plan to execute going forward... I.e. do what they say they will do on time, every time.
Further-I predict the deal will value IOC's share of the Elk/Antelope LNG project somewhere between $7 and $10 Billion.
Petro2458
RE: Deal - $7-$10B range - jft310 - 02-22-2013
Petro-I suume you are using IOC 58% ownership for your estimates.
At $7 Billion for IOC's 58% equals $12.086 Billion for the entire E/A,Thats $1.20 per mcf
At $10 Billion for IOC's 58% equals $17.241 Billion for the entire E/A,Thats $1.72 per mcf
Remember Mitsui thought IOC's E/A was in aggregate worth $22.000 Billion several years ago.That was
$2.20 per mcf. Based on the GLJ estimate at that time. But the GLJ estimate has been raised last year and
appears it will be raised again this year. That would adjust the numbers lower which I think is to low for
what really happens.
Doublebagger thinks this first deal will be quite a bit lower than the additional blended sell down prices over
time.The first deal is the hardest deal.
I was told by Sal I several times IOC wanted a sell down with IOC receiving payment per mcf based on the
actual production of liquids and NG. Is that where the bids are today.??
I think Doublebagger has the right approach. We are going to have at least 3 trains and so focusing on the
first deal and proceeds is incorrect. I think IOC and the IBers who will pick up IOC coverage again post deal
will explain what Doublebagger talks about a blended mcf price much higher than the first deal price. And
show a chart similar to what Doublebagger uses.
This mcf price whatever it is ignores Triceratops and other 40 prospects which will revaluated price wise
upwards with an LNG project finalyzed.
If Doublebagger is right and IOC realizes 30 T's then holding onto your shares for years might be the way to
go. But alas will any Super Major let IOC stay independent that long?????
The best monetization price could be achieved with an Exxon deal to augment their production in Port
Moresby. Will that be the chosen deal???
RE: Deal - $7-$10B range - sfiaes - 02-22-2013
Ken,
I'm not sure where you are going with this post.
First of all, let's be clear, doublebagger = Treasure Hunter. Things are confusing enough in this anonymous world of ours.
Petro2458 says:
"I predict the deal will value IOC's share of the Elk/Antelope LNG project somewhere between $7 and $10 Billion."
Treasure Hunter says:
"The first sell-down deal with a supermajor will be the cheapest deal IOC does. I expect the supermajor bids will come in around $1.50/Mcf in total value for the first 25%-32.5% of E/A."
These numbers do not contradict each other. Why are you taking issue?
RE: Deal - $7-$10B range - Petro2458 - 02-22-2013
Yep..I'm using 58% and its an actual cash flow analysis using the capital and operating expense provided by IOC.
Either way...really looking forward to this! Agree...I'm likely to stay with IOC through the next Exploration phase.
RE: Deal - $7-$10B range - jft310 - 02-22-2013
The problem is there are assumptions one must make to do $ estimates. Are our numbers the bidders asset
size numbers.? To many variables which is why the IBers asked for more time to evaluate each offer for
what it is. Last thing I heard was March 11th from the company for Board review and selection process. Not
to say we would hear on March 11th.March 6th is a big day as Wayne will tell us as much as he can about
the bids on that day. Also we can expect leaks after Feb 28th I would bet. The stock should perform quite
well during this time period. This March 11 date explains why we see all that April option activity today.The
best news will take days to get fully priced into the stock . Not to say we will not have a gap up . I was
further told to not sell below $200 a share or I would be helping the shorts from a non company informed
person.Their opinion, which seems to fit with Doublebagger estimates.
RE: Deal - $7-$10B range - Palm - 02-22-2013
I guess I question this idea of the discount on the first deal.
1. If the resource is what we all believe it to be; high quality, low cost to develop, liquid rich, basically one huge reservoir, then it is less risky than most other resources in the world.
2. PNG as a country is a much better risk compared to a) itself just a short time ago b) Australia in regard to not being (yet unproven) CSG, which is higher in pollutants and very very dry and c) African offshore.
3. PNG LNG is very quickly approaching production. Great article in Friday's PNGIndustry News discusses the progress and mentions they could be producing in 1Q 2014. This will be on schedule and highly supported by PNG government. This greatly due risks IOC's project.
"DESPITE the doubts and unexpected delays affecting various project sites, the $US19 billion PNG LNG Project appears on track to deliver first gas, and export LNG, by the middle of next year. By Wantok"
http://www.pngindustrynews.net/storyview.asp?storyid=795157756§ionsource=s0
IMHO the IBs will be throwing the above at bidders as support for a more fully valued /mcf price. Word is also that the PNG govt has been supporting a fair price; value is what royalties are based on.
We shall soon know, but with all the development IOC has already done and the de risking of PNG, I like our chances of higher prices.